Council’s funding warning as budget proposed to protect vital services

The proposed increase would see Babergh’s element of council tax bills for a Band D home rise from £188.10 a year to £193.73 for 2025/26 – an extra 11p a week.

This would mean Band D households paying £3.72 a week for all district council services, including waste collection, planning, public realm and supporting the local economy, culture and communities. 

Babergh keeps less than 10% of the total council tax bill, with the rest going to Suffolk County Council, the Police and Crime Commissioner, and town and parish councils.  

Figures show the net cost, after income and use of earmarked reserves are taken into account, of providing district council services to residents and communities will rise by 7% to just over £15m next year, with rising demand and costs due to inflationary pressures impacting local authorities nationwide.

According to statistics from the Local Government Association, one in four councils in England are likely to have to apply for emergency Government bailout agreements to stave off ‘bankruptcy’ within in the next two financial years.

Babergh’s cabinet member for finance, assets and investments, Cllr John Ward, said:

“Babergh continues to deliver excellent value for money, providing vital services that people rely on. 

“However, like many councils, the severity of our financial position cannot be underestimated. We are a well-run organisation, have already made savings and efficiencies, and have identified even more in this budget. 

“But even with our proportionate, balanced approach to protect our services, incredibly difficult decisions will have to be made unless the Government fixes the funding system for local authorities.”
 
The draft budget report shows savings and additional income totalling £2.559m have been identified. Savings include £403,000 where vacancies have not been filled, and other staff savings amounting to £313,000, while cost efficiencies including reductions in bank charges and reduced mileage costs amount to around £277,000.

But there is still a predicted deficit of £361,000 which must be met from reserves if no further savings are identified, and a forecast cumulative budget gap of £10.86m over the next five years – with the council due to run out of uncommitted reserves at its current rate by 2028/29.

This means the council must find significant savings and/or increases in income in future years in order to continue to balance the books. Further work to reduce the deficit will continue before the budget is finalised.

Council leader Cllr Deborah Saw said:

“We have made clear that we believe the current system of funding local government is broken and call on the Government to review this so we can continue delivering the services which our communities value and need. The sudden removal of the Rural Services Delivery Grant without notice, worth £308,000 to Babergh, is having a serious impact on next year’s budget.

“However, we will not let these financial pressures dampen our ambition for the district. We can still help to deliver positive change at grassroots level by being more innovative and working in partnership with communities in order to empower our towns and villages to develop solutions to issues that matter to them.” 

The draft general fund budget will be considered at a meeting on Friday (December 13), with further examination by councillors at Overview and Scrutiny committee on December 16. 

The proposed budget then comes back to cabinet in February for agreement before full council on February 26.